Citi: Expects AIA (01299) Q3 new business value to contract 2.6% year-on-year at constant exchange rates; maintains "Buy" rating.

Citi released a research report stating that it expects AIA (01299) to announce its third-quarter operating data for this year on October 30. It expects overall new business value to slightly contract by 2.6% year-on-year in the third quarter at constant exchange rates, and to decline by 2% year-on-year at actual exchange rates, mainly considering the very high base in the same period last year and the impact on China's bancassurance channel due to regulatory changes. The bank maintains a "Buy" rating on AIA with a target price of HK$103. Citi pointed out that AIA's new business value surged 25% year-on-year at constant exchange rates in the third quarter of last year. However, the bank expects the base effect to normalize in the fourth quarter and for steady growth to resume, and remains positive on the company's medium-term outlook, benefiting from operational resilience, sustainable growth, and the gradual improvement in operating profit after tax per share and dividends. By market, the bank expects AIA's third-quarter new business value in Hong Kong to be flat year-on-year at constant exchange rates; mainland China to contract 20% year-on-year at constant exchange rates and decline 15% year-on-year at actual exchange rates; Thailand to be roughly flat year-on-year at constant exchange rates and decline 3% year-on-year at actual exchange rates. Singapore and Malaysia are each expected to grow 10% year-on-year at constant exchange rates; other markets are expected to grow 7% year-on-year at constant exchange rates.